This article highlights the regulatory inefficiencies and bias of centrally-governed, top-down approach to health care. If one looks a little deeper it is obvious, by its structure as part of a larger third-party dominated payment system, that no matter how many insurance companies participate, it won’t bring down costs substantially. “Why not”, you ask? Two reasons: First, because the system is still basically PRE-PAID care with first dollar benefits, rather than a true insurance for things people can’t afford on their own. By over-insuring these front line routine expenses (that are not really too expensive IF insurance was not involved) we have created an artificially priced market where consumer influence is largely absent. This violates one of the basic tenants of insurance: never insure what you can afford on your own and what you expect to lose; this always results in over-paying. Second and related to the first point is that fees, and thus premiums. are locked in by requiring the provider to participate or “accept” the contracted rate and abide by billing, reimbursement and collection terms.
The combination of true indemnity coverage where the routine inexpensive services are paid out-of-pocket directly AND where contract is ONLY with the subscriber, not with the subscriber and physician, is the only way we are going to see price transparency, true competition for patients, and eventually prices falling to more of a sane range in the outpatient arena. Ironically, this will improve access much more than any exchanges or medicaid expansion could ever hope to.